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Governor Brown’s proposal to eliminate redevelopment will be voted on soon by the Legislature. We continue to work with our clients and many coalition partners to save redevelopment—California’s largest and most successful economic development and affordable housing program. We want to share with you our key talking points on redevelopment’s benefits and why the proposed legislation is risky, flawed and costly. Like Humpty Dumpty, redevelopment cannot be put together again if eliminated on July 1, 2011.
Please urge your Legislators to remove the elimination of redevelopment from the budget bill and refer redevelopment’s future to a Joint Legislative Committee for thoughtful reform.
Let’s make a difference,
All of us at Seifel Consulting
Overview of Redevelopment Benefits
As a critical engine for economic growth and sustainable development in California, redevelopment:
- Annually generates hundreds of thousands of jobs and puts Californians to work at a time when our State’s unemployment rate is over 12 percent.
- Contributes $40 billion annually to California’s economy and generates more than $2 billion annually in state and local tax revenue.
- Revitalizes blighted areas and catalyzes economic vitality by creating jobs, funding affordable housing, building public infrastructure improvements, and creating commercial opportunities.
- Is a critical affordable housing program—since 1993, it has built or rehabilitated nearly 100,000 affordable housing units—helping local governments meet their housing needs.
- Provides key tools to reclaim brownfield sites and stimulate infill development as opposed to sprawl.
Constitutional Defects of Proposed Legislation
- Violates Article XIII, Section 25.5 (Proposition 22), which prohibits transfer of tax increment to the State, any agency of the State, or any local jurisdiction.
- Violates Article XVI, Section 16 of the California Constitution, which established tax increment financing and requires tax increment to be paid to redevelopment agencies.
- Violates Article XIII A, Section 1, which requires property taxes to be collected and distributed to the local districts within each county.
- Violates federal and state provisions prohibiting the impairment of existing contractual obligations.
Serious Flaws
- Potentially violates existing contracts by substituting “successor agency” for redevelopment agency without parties’ agreement.
- Likely violates collective bargaining agreements covering public sector employees.
Lack of Accountability and Increased Bureaucratic Costs
- Creates confusion regarding responsibility for managing redevelopment agency obligations.
- Creates unelected and unaccountable Oversight Boards with inherent conflicts of interest.
- Presents significant risks for fraud, mismanagement and litigation.
- Creates potentially massive costs for dissolution of redevelopment agencies and creation of successor agencies.
- Imposes significant unfunded state mandates on counties by shifting responsibilities to counties.
- Increases potential liability of County Auditor-Controllers related to disputes over their decisions and determinations.
Poor Public Policy—Eliminates Key Tool for Housing and Economic Development
- Obliterates long-established investment tool, creating a cloud over all local government financing.
- Eliminates California’s largest and most successful housing and economic development program.
- Short-circuits thoughtful, statewide discussion on redevelopment tools and reform.
Like Humpty Dumpty, redevelopment cannot be put together again if eliminated on July 1.
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Libby Seifel joins the International Knowledge Team presenting at the “Practical Solutions for Delivery of Affordable Housing” conference in New Delhi, India, this November 30. Sponsored by India’s Ministry of Housing & Urban Poverty Alleviation and the Royal Institution of Chartered Surveyors (RICS), the conference will be an international review of affordable housing delivery, identifying best practice examples that have maximized the amount of affordable housing that can be generated with limited resources.
As background for conference participants, Seifel worked with the International Knowledge Team to prepare RICS' research paper Making Affordable Housing Work in India, which looks at previous research on the housing dynamics in India (and frameworks in comparable cities) and outlines key initiatives being undertaken by the Indian Government. The paper also examines the issues requiring immediate Government intervention. Click here for a copy of RICS' paper.
The adjustment of housing markets worldwide has called into question the viability of current policies and strategies. Consideration is being given to new and more creative delivery and partnership models to satisfy the increasing need for affordable housing worldwide.
International speakers will help set the scene for the conference, utilizing considerable experience in successful housing programs and giving examples where roadblocks to delivery were overcome. Local speakers from industry and the government/urban local bodies will participate in panel discussions sharing their experiences and best practice of affordable housing projects and also highlighting any obstacles in the current system that may be slowing or even stopping project delivery. Audience participation will encourage the consideration and debate on different solutions, drawing up potential immediate and mid-term solutions. Conference speakers and panelists include:
Representatives from the Government of India
Kumari Selja – Honorable Minister of Housing & Urban Poverty Alleviation and Minister of Tourism
Smt. Kiran Dhingra - Secretary, Ministry of Housing & Urban Poverty Alleviation
Sh. S. K. Singh - Joint Secretary, Ministry of Housing & Urban Poverty Alleviation
Sh. R. V. Verma - Chairman and Managing Director, National Housing Bank
International Experts
Mr. Stuart Woodward - Managing Director, Levvel Ltd
Mr. Thomas Davenport - Director, South Asia, IFC/The World Bank Group
Mr. Stuart Thomas - Director, Terra Housing Consultants
Eminent Industry Speakers and Policymakers
Mr. Sanjaya Gupta - Managing Director, PNB Housing Finance Ltd.
Mr. Kumar Gera - Chairman, CREDAI
Mr. D.P. Srivastava - CEO, Affordable Housing Development
Mr. Pranav Ansal - Vice Chairman & MD, Ansal API
Mr. Firdose Vandrevala - Chairman & MD, Hirco Developments Pvt. Ltd.
Mr. Naveen Raheja - President - Housing Committee, ASSOCHAM
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We are excited to announce that UC Berkeley Extension has launched a new sustainable design program and selected “Designing Effective California Public-Private Partnerships” for this program. This course has been expanded to a two-day course and will be eligible for academic credit and continuing education credit for planners and attorneys (AICP and MCLE).
Thursday and Friday, May 13-14, 2010, 9am - 5pm
Location:
San Francisco UCB Extension, Room 206, Art and Design Center, 95 Third Street, San Francisco
Information and Registration: http://extension.berkeley.edu/
Guest Lecturers: John (Jack) Nagle of Goldfarb & Lipman and Ethan Walsh of McDonough, Holland & Allen
Public-private partnerships (PPPs) provide a unique way for the government and private developers to work together to create sustainable and profitable urban infill developments. This two-day course offers practical techniques for designing, evaluating and negotiating effective PPPs. It describes how to effectively utilize California's unique legal and financial tools to accomplish a broad range of projects, from the redevelopment of surplus public properties and brownfields sites to the creation of mixed use developments that incorporate green design and mixed-income housing next to public transit.
Case studies and lectures by experts in the field offer practical techniques to understand and structure effective PPPs. Students will learn about the unique objectives and contributions of the public and private sectors in a PPP, the laws governing redevelopment-sponsored PPPs, and best legal practices in negotiating and documenting PPPs. They will also learn how to solicit, evaluate and select the right development team. The most successful PPPs effectively balance the financial objectives and needs of the public and private sector, so the course will present key fiscal and real estate concepts critical to understanding how the deal will be evaluated from both the public and private perspective. Participants will also learn how to encourage PPPs by using the unique tax increment financing tools of redevelopment, as well as other public financing techniques.
ELIZABETH (LIBBY) SEIFEL, M.C.P., AICP, is president of Seifel Consulting, an economic consulting firm. She helps private and public sector clients resolve complex urban growth issues, maximize real estate assets, and achieve fiscal goals. She has advised on more than 100 redevelopment project areas in California with projected new development values from $100 million to more than $4 billion.
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